On Thursday, The Federal Reserve reported that consumer household debt declined for the first time in 50 years of record keeping during the 3rd Quarter.

This news was met with…intense hand wringing.

Once again we can see the wonderful prisoners dillemma structure of our national economy.  What is best and rational for the individual consumer is not what is best for the economy as a whole.  For years, we’ve been told to save for our future.  Yet our economy was built to support the lifestyle of a nation of debtors.  Production capacity in the world economy is scaled to support an economy based on massive household leverage.

Now, with household investments and job prospects uncertain, the logical action for the individual is to pull back consumption and build a savings nest egg.  Of course, less credit card spending means less buying..means less sales…means less productions…means fewer jobs…means cats and dogs sleeping together.

It’s kind of disheartening to know that the health of our economic system is dependent upon the willingness of the individual household toact against their best economic interests.

In today’s Wall Street Journal comes a report that household energy usage has dropped at a greater rate than would be expected based on weather and economic reasons.   This weak signal may suggest a qualitative shift in consumer energy use.  Perhaps energy saving device adoption has reached a tipping point.  Household energy usage has been fairly stable and predictable.  A shift in household energy patterns will impact numerous energy industry model assumptions.

Surprise Drop in Power Use Delivers Jolt to Utilities